As a parent with a child who has special needs, it is essential to plan for their future. One critical aspect of estate planning is trust creation. A special needs trust can provide financial security for your child while also preserving their eligibility for government benefits. Here's what you need to know about this type of trust. 

What Is a Special Needs Trust? 

A special needs trust is a trust that is designed to provide for the needs of a person with disabilities without jeopardizing their eligibility for government benefits. These benefits may include Medicaid, Supplemental Security Income (SSI), and other programs that provide healthcare and financial assistance to people with disabilities. A trustee manages the trust and is responsible for disbursing funds to the beneficiary according to the terms of the trust. The beneficiary cannot have direct control over the funds in the trust, which helps to ensure that they do not exceed the asset limits for government benefits. 

What Are the Different Types? 

There are two main types of special needs trusts: first-party and third-party. A first-party trust is funded with the beneficiary's own assets, such as a personal injury settlement or inheritance. A third-party trust is funded with assets that belong to someone else, such as a parent or grandparent. Another type of special needs trust is a pooled trust, which is managed by a nonprofit organization that pools the assets of many beneficiaries. This last type can be a good option for people who do not have enough assets to fund their own trust. 

How It's Beneficial 

The main advantage of special needs trust creation is that it allows a person with disabilities to receive financial assistance without losing their eligibility for government benefits. It can also provide for their long-term care and support, even after their parents or other caregivers have passed away. In addition, a special needs trust can protect the beneficiary from financial abuse or exploitation. It can also help to ensure that the funds are used for their intended purpose, such as medical care or education. 

If you are a parent of a child with special needs, it is important to consider creating a trust for them as part of your estate plan. Spangler Estate Planning in Greensboro, NC, can help. SEP specializes in estate planning for families and can guide you through the process of trust creation. Our qualified attorneys can help you understand your options and make informed decisions that give you peace of mind. Contact us at (336) 252-1033 to schedule an appointment or visit our website for more information.